ZECO Holdings, was formed in 1964 and was formerly known as Resco. Through its subsidiaries: Delaward Engineering (used to build rail wagons and locomotives for the railway utilities in Kenya, Mozambique, Tanzania and Ethiopia, Zambia, Tanzania, Mozambique, Ethiopia, and Kenya), Crittal Hope (used to manufacture roller shutters, lift up garage doors, steel windows, door frames, burglar bars, and filling cabinets) and Zimplastics (used to manufacture agricultural implements). The company was taken over by the Harare based flamboyant businessman Phillip Chiyangwa in 1997 and he bacame the Chairman of the group from that time. The company listed on the local stock exchange in 2008 on the back of flowery television adverts showing construction projects that ZECO participated in back then and promising investors a good return on their money.
The group produced a dismal set of financial results for the half year ending 30 June 2016 as revenues dropped by a jaw dropping 373% from US$227,142 in the prior year to US$60,955 in the current year. In a clear sign that the cost containment measures were not adequate the group recorded a negative bottom line of US$884,010 compared to the US$867,322 in the same period in 2015. One wonders who continues to extend credit to ZECO for it to stay afloat; given the clear signs that these are the last kicks of a dying horse. ZECO has never posted a profit since dollarisation in 2009 and its revenues have tumbled year on year since from revenues of above $2 million to the current paltry figures being reported. The groups asset base is an alleged $41,276,000, a figure which any blind man can tell you is way overstated.
The going concern of ZECO is questionable and there is substantial doubt which is augmented by negative trends in operating results and continuous losses from one period to the next. Their situation is exacerbated by the floundering economy were there is minimal activity in terms of infrastructural development and the fact that National Railways of Zimbabwe (NRZ); ZECOs traditional key client is almost on its knees. ZECO has failed to win any meaningful government contracts with the majority of 2009/2010 tollgate tenders going to the now defunct Gulliver Consolidated. This is a clear sign that Phillip Chiyangwa has failed to use his contacts in government and with most construction work in the current market coming from government, ZECO will not see its fortunes change anytime soon.
Their future is seemingly bleak because they have not re-tooled and upgraded their plant and machinery which is archaic and antiquated. Their share price is a negligible US$0.0002 and that has been the year high and year low indicating that the shares have not being traded and that also shows the low confidence that investors have in this stock pick. With Uncle Phil seemingly concentrating his efforts on his newly found love of football, its a matter of time till ZECO kicks the bucket.